National Lisbon Coordinator of Hungary Budapest, 4January 2010

Contribution of Hungary

to the consultation on the future „EU 2020” strategy

The Lisbon Strategy, launched in 2000 with a target date of 2010 will come to its end this year. The original objective (significant improvement of the global position of the EU) will onlybeachieved partially, therefore Hungary shares the view that the programme should continue after the necessary reforms. To reach the overall targets for the following period Hungary believes thatEurope needs a strong, more realistic and feasible strategy.

Hungary welcomes the Commission’s working document that is considered to be a proper starting point for the preparatory works of the EU 2020 Strategy. It takes into account the commonly agreed main aspects to be duly elaborated in the next phase. However, the present paper is not detailed enough to be the basis of the next strategy: the headline objectives and the governance mechanism -that should be the heart of the programme- are still missing. These specific elements are crucial in transforming the principles into concrete actions.

The agenda of the preparatory works has to devote enough time for the elaboration of targets and governance based on broad consultations, taking account of the assessment of existing delivery methods as well as thorough assessment of setting up new policy delivery instruments. Our contribution presents briefly the main elements of the Hungarian position concerning the next programme.

  1. Hungary shares the view that focus should be kept on growth and jobs, the proposed three priorities are in line with our expecations, but headline objectives are still missing.

The new strategy shall be led by a vision on the European Union in 2020 based on growth and jobs, competitiveness and sustainability with a view to achieve higher living standards and greater social, economic and territorial cohesion. The challenges and thus the targets of the Lisbon Strategy remain to be relevant; the former prioritiesare to be maintained. The three priorities of the consultation paper can cover a properly wide scope in a focused manner. The interconnections and interdependence between the priorities should also be explored and taken into account as well as their relation with macro-economic policies.The headline objectives can transform the concept into practice, but these elements are still not included in the Commission’s discussion paper and need to be elaborated in the next phase of the preparatory works.

(1.) We share the view that knowledge has a privileged role as the engine for sustainable growth. The strategy has to find the right coordination of research, innovation and education in order to fully exploit the opportunities of a knowledge economy. Synergies of the knowledge economy with social inclusion should be placed in the focus of the programme, an economy where innovation makes the difference can really support our economic and social objectives simultaneously.

Under the umbrella of the knowledge economy the role of ICT is crucialas measures taken for the development/improvement of the information society and economy in Europe contributing to the achievement of goals set by the strategy. The role of ICT in offering great opportunities for SMEs is fully acknowledged as well as its potential for regional development through new innovative start-ups.

According to Hungary innovationneeds to be interpreted in the widest sense, it covers technological and non-technological innovation as well. We believe that a strong research and innovation policy in the EU 2020 strategy goes in tandem with the actions towards a fully functioning European Research Area, often called as the “Fifth Freedom”.The enhancement of digital literacy as a paramount scope of the EU 2020 Strategy is highly recommended. The role of e-governance in better quality of life, social inclusion and competitiveness is also emphasized. Innovative, inclusive user centered electronic public services, relevant ICT solutions can be important drivers for integration, growth and competitiveness of the EU.

(2.) Empowering people in inclusive societies will require that employment related policies focus on activation, increasing labour supply and facilitating transitions in the labour market. A key objective is to ensure inclusive labour markets, especially for the most vulnerable groups facing disadvantages based on the principles of solidarity and equal access. To achieve this

  • reinforcing the role and extending the scope of active labour market policies,
  • implementing tailor-made and balanced flexicurity strategies building on the common principles of flexicurity,
  • modernising social protection systems to ensure their sustainability,
  • helping the adaptation of the workforce to new job requirements, and
  • investment in skills and efficient education and training systems responsive to labour market needs

are essential.

Facilitating entrepreneurship and self-employment while avoiding the segmentation of labour markets could be an element of the strategy to increase employment opportunities and favour innovative solutions. Transition to an eco-efficient economy should go hand in hand with investing is green jobs. This process may have negative consequences on employment therefore anticipating and assessing impacts on employment and assisting workers and enterprises in adapting to and preparing for new requirements is essential.

(3.) Greening of the economy and the improvement of competitivenessare to be managed in a coordinated way. EU competitiveness requires infrastructure, competition and market to be organized on European level.Here we would like to highlight that upgrading and inter-connecting infrastructure, improving business environment, and accelerating the market uptake of innovations will equally contribute to the competitiveness of the EU.Hungary considers the following aspects particularly important:

  • The Single European Market has a crucial role in the improvement of business environment, therefore widening and deepening the internal market is strongly supported by Hungary.
  • The special role of small and medium-sized enterprises which are the backbone of the European economy and a key factor in increasing demand for labour needs to be considered. Actions defined in the Small Business Act should constitute an integral part of EU 2020. At the same time unleashing the innovation potential of European SMEs with regard to the European Innovation Plan is needed.
  • The improvement of business environment needs to maintained in focus during the next strategic period. The conditions of financing should be in line with the business model of innovative sectors.
  • Hungary –as host of the European Institute of Innovation and Technology- underlines the innovation-related aspects of the eco-efficient transformation pointing at the strong relation of priority 1 and 3.
  • Mobility of workers is a crucial element of this priority. An important element for this purpose is the development of national qualifications frameworks in line with the European one.
  • Smart specialization on EU level can lead to an efficient allocation of European resources.
  • Agriculture plays an important role in securing safe and healthy food, that shall be maintained also in the future in a greener and more sustainable way. Agriculture also contributes to the development of the rural economy and provides employment for the rural population. Agriculture may play an important role in mitigating the negative effects of climate change (carbon sequestration) and also in supplying biomass as source of renewable energy resources.
  • Eco-friendly technologies are good for business, reduce pressure on environment and can create new jobs. It is necessary to take away barriers of developing environmental technologies characterised by savings in water, energy and natural resource, as well as to promote sustainable consumption and production patterns, based on a proper understanding of consumer behaviour and of social impacts.
  • Europe continues to face a number of challenges in the field of energy (eg. the import dependencyand limited diversification achieved so far, high and volatile energy prices, etc.). These challenges are to be managed together with climate change problems taking into account all interactions, with a focus on resilience and adaptation. As priorities, we underline the Nabucco, the South Stream project and the development of well-structured regional energy markets promoted by the interconnection of networks among neighbouring countries such as NETS project.
  1. Horizontal aspects should be channeled into all priority areas of the EU 2020.

Preliminary debates about the future growth and jobs strategy have identified some deficits of the Lisbon programme and also some challenges to be tackled in a more explicit way in the next decade. Changes in the global circumstances and in internal conditions of the European Union require further interventions that need to be managed by the next strategy for growth and jobs.

(1.)External dimension of the strategy:common external actions in numerous policy areas like global trade and economic issues. The EU should press increasing openess in international trade and investment flows in order to create a level playing field for our businesses. This should go together with a strengthened international regulatory cooperation.

Secure and efficient energy supply for Europeshould be a cornerstone of the external dimension of the growth and jobs strategy. The eco-efficient approach can offer an important contribution for solving the problems concerning secure and efficient energy supply for Europe.

(2.) Comprehensive measures covering different policy areas,in order toaddress the challenge of anageing population in Europe.

  1. A strong strategy requires strong and capable governance, therefore the need for reform is urgent in this area.

One of the major challenges that the Lisbon Strategyfaced was the governance of the programme both at Community and at Member State level. Clear, feasiblecoordination, decision-making and implementation framework should be defined for the Community and Member States level as well. The main task is to increase the influence of the strategy on political level. The consultation paper remains very general concerning the governance of the strategy, this part needs to be elaborated more in detail in the next phase of the preparatory works, otherwise implementation will continue to be the Achilles’ heel of the growth and jobs programme.

  1. To achieve the overall aims by 2020 an appropriate harmonisation and coordination capacity is needed among the different policy areas of the EU to discuss and to set up short and medium term targets and actions. On European level acommissioner should be appointed to manage EU 2020. This commissioner would be a high-level representative of the strategy,in charge of the European level coordination and implementation involving stakeholders and providing the publicity, being at the same time high-level contact between Member States and the Commission. His/her competence would be to harmonize growth and jobs related EU strategies and EU policies in specific areas cooperating with relevant DGs of the Commission and other institutions of the European Union.
  1. For a successful national level coordination Member States should appointthe national coordinatorsat leaston ministeriallevel. This coordinator should visibly represent the strategy on the level of the Member State, and should have the necessary competence to coordinate among national ministries and to drive national policies towards growth and jobs objectives. The national coordinator continues to be the high-level national contact between Member States and the Commission.
  1. The Commission should play a central role in the EU 2020 strategy. This role is not reflected clearly in the working document. Therefore we need to underline that the owner of the Community dimension is the Commission, their task is to initiate the EU level actions. If the Community Lisbon Programme will not have a stronger role, the main added value of the growth and jobs programme: the synergies derived from the cooperation of Member States will remain unexploited.
  1. The EU 2020 Strategy musthave a clear and broad vision for the European Union for 2020, all elements should be derived from the common vision.

The new strategy shall be led by a vision on the European Union in 2020 based on growth and jobs, competitiveness and sustainability with a view to achieve higher living standards and greater social cohesion. In a ten-year long strategy long term objectives shall be set.

The strategy shall contain also the planned instruments and more concrete steps in three-year long action plans, for that detailed smart (i.e. specific, measurable, achievable, relevant and timed) actions shall be defined.

The targets, the instruments and the decisions made for the realization shall bespecified and assessed on a yearly basis both on Community and Member State level. The responsible commissioner and the national coordinator(s) should together agree on tasks and evaluate the progress in bilateral and multilateral ways. The present reporting system should change, it should be streamlined focusing on those elements that really helps the common evaluation of achievements.

Since the strategy serves for medium and long term goals, the next growth and jobs strategy should not be muddled with crisis management, however under the present circumstances their harmonization is necessary, interactions should be identified. Exit strategies could be incorporated in lower level of the programmes (such as 3-year action plans or yearly implementation).

  1. Concrete, smart objectives shall drive the implementation of EU 2020.

The underlying reasons for the achievements and shortcomings of the existing strategy should be clearly identified and the appropriate lessons should be learnt to shape the strategy after 2010. The effects of the economic crisis should be considered as well, and if long-term, structural consequences will be identified, the new strategy needs to respond to these challenges, too. The new targets should be carefully defined, analysed, discussed with stakeholders and agreed by all interested parties. New, specific targets and actions on all strategic levelsshould be duly concrete and manageable.

  1. The next growth and jobs strategy should reflect the diversity of the Member States.

National targets should reflect not only the common goals, but the starting position of the Member States as well. Member States’ targets should be defined and the achievements should be assessed on this double basis.

  1. Better coordination with EU policies and seeking for synergies with open methods of coordination working in different fields.

A stronger coherence and coordination with the Sustainable Development Strategy is necessary to enforce the sustainable use of resources in all policy fields to be covered by the post 2010 strategy.

Better coordination of the next growth and jobs strategy and the Stability and Growth Pact in the macroeconomic area is needed.It is important that the next growth and jobs strategy should not be overburdened by policy dimensions that are managed and assessed in the context of the SGP, overlappings are to be eliminated. The proposed post-Lisbon commissioner can play an active role in shaping the right link between the cooperating areas.

The role of cohesion policy should also be assessed especially that it constitutes a policy vehicle that contributes to the implementation of EU development priorities at local level taking account of territorial potentials, needs on the basis of local opportunities. This connection with local level, and the lack of ownership at local level was a serious hiatus of the implementation of the current strategy.The categorization of the interventions (earmarking) should be revised taking the differences in the requirements of different regions into account.

Feeding-in and feeding-out mechanisms with the open method of coordination (OMC) on social protection and social inclusion also need to be reinforced to ensure a stronger social dimension for the strategy. Seeking for synergies with the OMC working in education is also important.

Harmonisation of the EU 2020 Strategy and all relevant EU policies, strategies (eg. ERA vision 2020, post i2010, Education and training 2020) is a crucial point of its successful implementation.

  1. The mobilization on regional and local level should be promoted, networking should be enhanced.

Regional and local actions are essential in achieving the growth and jobs goals. A workable framework should be elaborated in order to involve efficiently regional and local actors in the post-Lisbon process.Specific targets should be defined also on these levels and efforts for European growth and jobs should be done. Certain elements of the regional and local dimension might be independent from national level programmes on the basis of local potentials and values. This framework may facilitate Member States networking activities as well.Social partners at European and national level are to be included properly in the post-Lisbon process, too.

  1. Hungary supports the improvement of the methodological background of the growth and jobs strategy, that can promote the influence of the evidence-based factors instead of actual political trends on planning, monitoring and recommendations.

The efficiency of the strategy can be improved through evidence-based strategy planning and implementation (including monitoring, evaluation and feedbacks). Our expectation is that strengthening the evidence-based approach will help us to form well defined targets and recommendations. For this purpose the improvement of the methodological background of the strategic planning and evaluation is necessary. After further improvement the Lisbon Assessment Framework (LAF) can become an adequate basis of the evidence-based approach. Scoreboards based on thorough methodological background can support the communication. For the sake of the wider use of LAF further efforts are needed to connect it more strongly to planning and evaluation.

  1. Communication must be a main aspect of the reform.

The EU has to launch key actions in the frame of the next growth and jobs strategythat would support not only better management, but better communication as well. These key actions can represent the mission of the strategy (synergies deriving from cooperation among policies and among Member States), they are suitable for communication and therefore for mobilization on all levels. The responsible commissioner and national coordinators should report about the progress of key actions in order to focus public attention on the growth and jobs strategy.